Gas exporters play down price squeeze claims

The group representing Australia's exporters of liquefied natural gas says consumers shouldn't worry about reports that large scale exporting of gas will cause domestic shortages and cause prices to treble. The Australian Petroleum Production and Exploration Association says as prices rise it will make unconventional gas supplies like controversial coal seam gas cheaper to access.

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TONY EASTLEY: The group representing Australia's exporters of liquefied natural gas says consumers shouldn't worry about reports that large scale exporting of gas will cause domestic shortages and cause prices to treble.

The Australian Petroleum Production and Exploration Association says as prices rise it will make unconventional gas supplies like controversial coal seam gas much cheaper to access.

William Rollo reports from Gladstone.

WILLIAM ROLLO: The reasoning of the National Institute of Economic and Industry Research report released yesterday was straight forward - it says the massive expansion of Queensland's gas export industry will have significant implications for the national economy and that current regulations favour exporting gas rather than selling it domestically - which in turn will cause prices on the domestic market to skyrocket and the report concludes that that's enough to create an economic downturn.

But the Australian Petroleum and Exploration Association says that's too simplistic.

Its chief operating officer for the Eastern Region Rick Wilkinson says as gas prices rise it will make unconventional gas, such as coal seam and shale gas less expensive to develop.

RICK WILKINSON: We had for a very long time in Australia domestic gas prices that were some of the lowest in the world on conventional gas. Now we have to move on as other parts of the world have to unconventional gas and that's a high cost basis to work from.

WILLIAM ROLLO: Mr. Wilkinson agrees the export boom will drive gas prices higher but says the way to mitigate that is through increased exploration.

RICK WILKINSON: The question is how do we improve the access and develop the next generation of gas to bring on for the future generations and that's why exploration and removing red tape is so important to our industry.

WILLIAM ROLLO: Queensland's Deputy Premier Jeff Seeney agrees.

JEFF SEENEY: What our Government is determined to do is to make sure that the gas resources that we have can be developed in a timely way, in a responsible way to make sure that all the market sectors can have access to the energy source. It's about making more gas available to that there can be no suggestion of a market shortage.

WILLIAM ROLLO: In Western Australian, the Government has mandated that 15 per cent of gas production from the North West Shelf is reserved for domestic use.

JEFF SEENEY: In Queensland especially the coal seam gas supplies are quite an extraordinary resource. It is about making that available to the market in a way that ensures that everybody has the supplies that they require.